If General Motors makes cars and Dell makes computers, legislatures “make” bills. The job of legislators is to identify problems and propose solutions; without problems, there would be nothing to solve, and thus no “product”. Because obviously there is never a shortage of issues, perhaps especially in California, there are always lots of new laws to create. In a typical year, California governors may sign as many as 1000 of them—you may be breaking some as you read this column!

For the 2005 legislative year, the number of new laws is actually reduced somewhat from recent years. Some suggest that the reduction is due to anticipation over the November special election. In any event, the total number of bills signed by Governor Schwarzenegger for 2005 was 729, approximately 25% down from most years.

Just because the total number of new laws is down, however, does not mean that the California Legislature was not busy. Every year there are numerous bills signed that have important ramifications for real estate and escrow, and 2005 was no exception. Of over 40 bills monitored by CEA during the year, 15 were signed, and another six were passed by the Legislature but vetoed by the Governor.

The following briefly highlight a number of the bills monitored by CEA and signed by Governor Schwarzenegger. Unless otherwise noted, the bills take effect on January 1, 2006.

• AB 361 (Runner): Notaries. Makes it a misdemeanor for notaries to willfully fail to perform required duties under the notary law, including the duty to keep the notary seal under the notary’s direct and exclusive control. Requires revocation of the notary commission upon the conviction of any misdemeanor relating to notarial duties, or for any felony conviction. Chapter 295, Statutes of 2005.

• AB 394 (Niello): Housing Discrimination. Modifies procedures for re-recording property documents which contain illegal restrictive covenants. In general, the bill is designed to make it easier for property owners to re-record CC&Rs containing illegal racial covenants.

• AB 459 (Oropeza): Supplemental Property Taxes. Requires sellers of residential property to deliver to buyers, along with other required seller disclosures, a notice that the buyer will be receiving one or more supplemental property tax bills.

• AB 1078 (Keene): Contaminated Property. Creates comprehensive provisions relating to residential property contaminated by methamphetamine production. These provisions relate to identification of property, clean-up, disclosure to buyers, recording and releasing of liens for remediation expenses, and others. Chapter 570, Statutes of 2005.

• SB 137 (Ducheny): Common Interest Developments. Enacts major changes to the laws relating to collection of assessments by homeowners associations, and the enforcement remedies available to associations for non-payment. Among other changes, prohibits nonjudicial foreclosure for delinquent assessments until the total indebtedness is at least $1800 or the debt is at least 12 months past due. Makes additional changes in lien procedures. Applies to debts arising on and after January 1, 2006. Chapter 452, Statutes of 2005.

• SB 158 (Machado): Powers of Attorney. Deletes the line from the Uniform Statutory Form Power of Attorney for the social security number of the person granting the power of attorney. Chapter 251, Statutes of 2005.

• SB 408 (Margett): Escrow License Fees. Sponsored by the Escrow Institute of California, extends the current fees charged to independent escrow companies by the Department of Corporations until January 1, 2010. Chapter 257, Statutes of 2005.

• SB 513 (Soto): California National Guard: Financial Obligations. Permits survivors of California National Guard members killed in the line of duty to defer accrual of additional interest, without penalty, for up to six months following the death of the service member. Applies to mortgages and many other financial obligations. Chapter 513, Statutes of 2005, effectively immediately upon the Governor’s signature on September 22, 2005.

• SB 565 (Migden): Domestic Partners. Excludes from the definition of “change of ownership” any transfer of property between registered domestic partners. The exclusion will commence with the lien date for the 2006-2007 fiscal year. Chapter 416, Statutes of 2005.

• SB 1018 (Simitian): Elder Abuse. Makes all employees of financial institutions, defined as FDIC-insured institutions and their affiliates, and credit unions, “mandated reporters” of suspected financial elder abuse if they have direct knowledge of incidents causing reasonable suspicion. Effective on January 1, 2007. Chapter 140, Statutes of 2005.

by Michael D. Belote
California Advocates, Inc., Sacramento

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